Oracle Shares Hit 52-Week Low as Credit Rating Downgraded Amid AI Infrastructure Concerns Shares of Oracle (NYSE: ORCL) reached a new 52-week low of $121.50 on Friday, marking a steep decline from its previous high of $345.72. The company’s market capitalization has dropped to approximately $365 billion, reflecting investor unease over its financial commitments tied to artificial intelligence (AI) infrastructure. The stock’s downturn was compounded by a recent credit rating downgrade from S&P Global Ratings, which cut Oracle’s rating to BBB-—just one notch above junk status. The downgrade stems from the company’s massive capital expenditures to build AI data centers, raising concerns about its financial sustainability. The market’s reaction underscores growing skepticism about Oracle’s ability to manage its AI-related investments without straining its balance sheet. S&P Global Ratings highlighted the financial strain, noting that Oracle spent $55.7 billion on capital expenditures in fiscal 2026, despite generating $32 billion in operating cash flow. The result was a record free cash flow deficit of $23.7 billion for the year. S&P projects the gap will widen further, forecasting capital expenditures of $90 billion to $95 billion in fiscal 2027 and a free cash flow deficit of $42 billion. Oracle’s existing debt load, which stood at nearly $130 billion at the end of fiscal 2026, adds to the concern. The company’s financial challenges are compounded by its reliance on a single major client, OpenAI, which accounts for roughly half of Oracle’s $638 billion in remaining performance obligations. These obligations represent contracted revenue Oracle has secured but not yet delivered. If OpenAI fails to meet its commitments, Oracle could face significant losses from underutilized data centers.#oracle #openai #free_cash_flow #s_p_global_ratings #credit_rating
